Online wallet-turned-eCommerce portal Paytm, which has recently received a license to operate a payments bank is looking to launch the services by August, 2016 with around 20 million account holders. This bank will be an entirely different unit and Paytm’s mastermind Vijay Shekhar Sharma will hold majority share i.e. 51 percent while the remaining will be shared between the existing wallet firm and other group firm.
After the launch Paytm will ask for consumer’s consent to migrate to the bank. Speaking to a media house, Sharma said that the target is to have 6 cr ‘WACASA’ (wallet, current and savings accounts) of which he aims at having 2 cr current and savings accounts.
The only challenge in order to migrate these customers into account holders is to complete the ‘know your customer’ process. The process is lengthy and complex as it requires a personal interaction and collection of identity and address proves.
To head the payments bank division, Sharma has roped in former PwC consultant Shinjini Kumar as the CEO.
However, amidst the payments bank developments, the Noida-based firm had also forayed into online movie bookings such as Bookmyshow. As per Sharma, the company would continue imposing convenience charges as this was a requirement from the exhibitors but, will reimburse customers by giving away cashbacks.
Currently, Paytm is burning huge cash on some transactions where it is a payment mediator which it considers as a part of consumer acquisition plan. The company also receives huge revenue as a transaction fees from some selective payments like premium insurance for private companies.
Speaking on an event, RBI Governor, Raghuram Rajan said that some the rule for these payments bank will be made as they go along. Here he also mentioned Paytm as an innovative firm and where they push the system will be interesting to see.